German Sovereign
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Few MTN issuers have so far issued in the Libor-replacing euro short term rate (€STR) format, with deals limited so far to supranationals, agencies and, this week, a sub-sovereign. Some bankers blame the 2017 EU Prospectus Directive for tightening up the rules on adding new indices to programmes, leaving non-exempt issuers on the sidelines. -
The European Central Bank launched a strategic review of its monetary policy strategy on Thursday, but otherwise kept its fairly dovish stance on eurozone rates more or less unchanged.
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Nederlandse Waterschapsbank and the State of Brandenburg took advantage of a lack of euro SSA supply this week to bring well subscribed deals on Tuesday. The Asian Development Bank will be looking to follow with a 10 year euro benchmark on Wednesday.
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The dollar SSA bond market, unfettered by geopolitical volatility, enjoyed an excellent week, although it is still lagging behind the euro market in terms of overall supply.
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KfW and Canada both launched dollar benchmarks on Wednesday, bringing a pair of highly subscribed and tight deals. Following their success, two Asian SSA issuers prepare to join the busy dollar market.
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Germany’s debt management office, the Finanzagentur, is confident its green bonds will be liquid when the first issue is launched in the second half of 2020 and has high hopes that they will trade tightly relative to ordinary Bunds. Its innovative plan to use a “twin bond” structure is designed to reassure investors and remove any doubt about liquidity.
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KfW, the European Investment Bank (EIB) and, in the medium-term note (MTN) market, a German region and a Finnish agency have kicked off the Norwegian krone market for SSAs. Bankers are hoping to extend krone’s impressive form from last year into 2020.
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Investors piled into the euro public sector bond market on Wednesday, allowing borrowers to achieve well subscribed order books and minimal new issue concessions for a range of maturities.
